Energy Solutions in Pursuit of a Problem

By Benita M. Dodd

Georgians are nervously watching petroleum prices climb amid ongoing unrest in oil producer Libya. Under the Gold Dome, legislators are again subjected to the perennial push for home-grown alternatives to fossil fuels. Just this week, German experts took a new tack at the Capitol with a promising presentation on renewable sources of energy and their economic benefits. The temptation is great, but legislators must focus on commonsense policy that promotes cost-effective, clean energy.

Germany has made remarkable inroads into renewable energy generation. Renewables have grown from 4 percent to about 10 percent of Germany’s energy portfolio over the past decade, German scientist Christine Woerlen told legislators. Not the least of the benefits, according to Woerlen, is German economic development: 350,000 jobs are now in “green” energy, about half as many as in Germany’s auto industry. One in three electrical engineers is involved in renewable energy.

Renewables have also helped Germany, whose only domestic fossil fuel source is lignite, reduce its energy dependence and its greenhouse gas emissions, Woerlen added. But it comes at a price: Energy prices have increased over the past 10 years. In fact, a 2010 study found Germany’s average energy rates (about 32 cents U.S. per kilowatt hour) and energy taxes (41 percent) to be the second highest in the European Union, behind Denmark. Georgia’s rates averaged 9 cents per kwh.

“Utilities are increasing their prices; we don’t know why,” Woerlen told legislators.

Here’s a possible explanation:  Renewable energy sources, especially wind and solar, are unreliable, inconsistent and often unavailable when customers might require the energy.  This fact causes the greatest underestimation of the true cost of renewable energy. While German utilities must buy the electricity that “green energy entrepreneurs” produce at a government-set price, the utilities must also maintain operating levels as though renewable energy sources are not on the grid in order to be able to provide a consistent, reliable source of electricity for industry, hospitals and homeowners when necessary. If fewer customers routinely buy utility-generated energy, utilities must increase prices to the remainder to cover generation costs.

Georgia, which incidentally provides biomass pellets to Germany for energy generation, is lagging the nation in job recovery. But electric power should invite jobs to Georgia, not be the source of jobs, especially not at German energy prices. Diversity in energy is important to competition and reliability, and advancements in solar and other renewables in Georgia are occurring. But they must move forward within the competitive constraints of the free market, not through artificial subsidies.

Energy generation in the United States is the cleanest it has ever been. Energy productivity is the highest ever: Americans are producing so much more per capita with less energy output. The search for clean, efficient and cost-effective energy sources should be encouraged, but not by mandate.  “Renewable” energy – solar, wind, biomass and hydropower – is not necessarily clean energy. There is no global energy shortage; that is evident in the new sources of fossil fuels being discovered almost daily.

If the challenge is emissions, science-based regulatory measures can limit pollution without limiting options. Technology continues to make energy utilization cleaner than ever, from power plants to auto engines to home appliances. If the issue is clean and reliable energy, nuclear energy provides the best option, and Georgia is already leading the pack in the race for the next generation of nuclear facilities. If the issue is global instability, legislators must apply pressure on the administration and Congress to streamline the process to allow safe and responsible exploration of America’s own energy resources, from vast off-shore reserves to federal lands. If the issue is efficiency, encourage research into more energy-efficient options.

There is always more that can be done to produce cleaner energy. Given the opportunity, America’s spirit of innovation has produced more for its citizens’ advancement and quality of life than government ever has. Germany’s admirable but expensive venture into renewable energy is by government mandate. Americans, on the other hand, pride themselves on their freedom of choice – and their ability to choose wisely.

Benita M. Dodd is vice president of the Georgia Public Policy Foundation, an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (March 11, 2011). Permission to reprint in whole or in part is hereby granted, provided the author and her affiliations are cited.

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